France Would Not Support Oil Release Under Hollande

Francois Hollande, Socialist Party candidate for the 2012 French presidential election

REUTERS

France would withdraw support from a U.S.-British plan to release strategic oil stocks if Socialist front-runner Francois Hollande beats President Nicolas Sarkozy in the presidential election run-off on May 6, the energy adviser to Hollande said on Thursday.

According to Reuters, France joined Britain and the United States last month in talks to tap into strategic stocks, saying a move could happen in a matter of weeks.

While Sarkozy's right-leaning government is pushing for a drawdown of emergency inventories to cut fuel prices, the Socialists say stocks should only be used in case of a severe supply disruption, not to manage prices.

"Strategic stocks are here in case of a major supply crisis," Francois Brottes, energy adviser to Hollande told Reuters. He said a release was not part of the Socialist candidate's proposals.

Brottes said that a drawdown could leave France in a vulnerable state in case of a major supply crisis.

"This could potentially be dangerous," he said.

Fuel prices have been a high-profile electoral theme in France with diesel and gasoline prices at record highs. The United States also faces pressure over gasoline prices ahead of presidential elections later in 2012.

Hollande proposes to freeze retail fuel price increases for three months and to reinstall a system that reduces the amount of taxes included in the price of petrol when oil prices rise and to push taxes up again when crude prices fall.

Opinion polls predict Sarkozy will lose the presidential election. Latest polls put Hollande in a double-digit lead in a May 6 runoff after a first round of voting for five candidates that will be held on Sunday.

That would leave a two week gap for a release to be agreed to guarantee French support.

Jean-Marc Tenneson, head of France's emergency oil stocks agency, told Reuters the government had not yet been in touch with the agency concerning a potential release.

U.S. President Barack Obama discussed conditions on world oil markets during a video conference last Thursday with French President Nicolas Sarkozy, the White House said, but declined to say if they talked about the release of strategic reserves.

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